FISCAL NOTE

FUND(S):

new fund

Sources of Revenue:

Special Fund

Legislation creates:

A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to move the Fleet Management Office from the Purchasing Division and place it under the Department of Administration as an independent office. The bill also removes all the exemptions so that all vehicles would be managed by the Fleet Management Office. The exact fiscal impact with passage of this bill can not be determined due to unknown circumstances. Based upon the information available, we anticipate that the initial total cost would be approximately $183,500.00. However, this figure would be offset by reduced costs long term as a result of a more efficient fleet program, lower fuel costs, reduced commuter use, and reduction in the number of vehicles.

Fiscal Note Detail

Effect of Proposal

Fiscal Year

2010Increase/Decrease(use"-")

2011Increase/Decrease(use"-")

Fiscal Year(Upon FullImplementation)

1. Estmated Total Cost

0

183,500

183,500

Personal Services

0

0

0

Current Expenses

0

0

0

Repairs and Alterations

0

0

0

Assets

0

0

0

Other

0

0

0

2. Estimated Total Revenues

0

0

0

Explanation of above estimates (including long-range effect):

The above estimates include $65,000 for personal services. This is based upon a salary of $50,000 plus benefits for the hiring of a Fleet Manager. It is unknown whether the Fleet Manager will be a new employee or an existing employee. Therefore, no increased cost may be necessary for personal services if a current employee assumes the duties.

The above estimates also include a $118,500 increase for current expenses associated with the ARI card. Currently the Department of Administration pays Automotive Resources International (ARI) $3.95 per month per vehicle for use of a fuel card, for negotiated discount prices on purchases of fuel, for providing a call center, for monitoring of vehicle maintenance and gas charges, etc. The $3.95 is paid for the roughly 1600 vehicles currently under the Department of Administration’s fleet management program. It is believed that once the fleet management program includes all passenger vehicles, that the monthly fee would be negotiated and that fee reduced. ARI currently advises when preventive maintenance is needed which lowers the costs of repairs later in the vehicle’s life; they track maintenance performed on all vehicles which prevents no shop overcharges and unnecessary repairs; and they negotiate lower contracted pricing with vendors to get maintenance preformed at reduced costs. The cost of ARI’s services actually reduce costs to the state, there is no data to demonstrate how much the State has saved through the use of their services.

It is unknown what exact costs are currently being expended by those agencies who are exempt from the Department of Administration’s fleet program. The $118,000.00 assumes that the $3.95 monthly fee would remain the same and that none of the exempted agencies are incurring a monthly fee for use of a fuel card.

The Department of Administration’s fleet management office charges an administration fee to fund their office and to subsidize the Aviation office. There would be no increased costs to the state as the amount needed would remain the same. Consolidating the fleet would spread the amount required among all agencies rather than just the vehicles currently under the Department of Administration fleet program. Thus, making all agencies contribute rather than a few select agencies paying for everyone.

Memorandum

It is anticipated that the consolidation of the State’s fleet under one program with standardized rules, forms and reporting requirements will result in a more efficient program and provide long term savings to the state.